Daily Comment on News and Issues of Interest to Michigan Lawyers

09/07/2010

Deconstructing the U.S. Law Firm Model: A Tectonic Shift?

The ABA Journal's feature story this month, "Law, the Investment: Entrepreneurs attract major cash to draw legal services away from law firms," is about the legal entrepreneurs who are pioneering the delivery and packaging of particular pieces of the legal industry, and making big profits in the process. Los Angeles-based company Integreon, which has raised about $100 million since 2001 to buy legal services companies, typifies what's going on. Its majority owner is Ayala Corp., a Phillipine-based conglomerate, which invested through LiveIt Investments, a business process outsource holding company. And this year Integreon attracted $50 million from Actis, a private equity firm that specializes in emerging markets. Integreon's president and CEO, Liam Brown, says Integreon is not in competition with law firms, telling ABA Journal, "It's just the tectonic shift from the old law firm pyramid [staffing model] to putting the right people doing the right thing in the right place at the right time."

The story also puts the developments in perspective:

Outsourced legal services make up only a fraction of the total legal market. As one measure, America's 100 biggest law firms grossed a total of $64.8 billion last year, while e-discovery services—a fast-growing segment of the outsourced market—are expected to generate $4.4 billion in sales this year, according to Socha Consulting of St. Paul, Minn.

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Deconstructing the U.S. Law Firm Model: A Tectonic Shift?

The ABA Journal's feature story this month, "Law, the Investment: Entrepreneurs attract major cash to draw legal services away from law firms," is about the legal entrepreneurs who are pioneering the delivery and packaging of particular pieces of the legal industry, and making big profits in the process. Los Angeles-based company Integreon, which has raised about $100 million since 2001 to buy legal services companies, typifies what's going on. Its majority owner is Ayala Corp., a Phillipine-based conglomerate, which invested through LiveIt Investments, a business process outsource holding company. And this year Integreon attracted $50 million from Actis, a private equity firm that specializes in emerging markets. Integreon's president and CEO, Liam Brown, says Integreon is not in competition with law firms, telling ABA Journal, "It's just the tectonic shift from the old law firm pyramid [staffing model] to putting the right people doing the right thing in the right place at the right time."

The story also puts the developments in perspective:

Outsourced legal services make up only a fraction of the total legal market. As one measure, America's 100 biggest law firms grossed a total of $64.8 billion last year, while e-discovery services—a fast-growing segment of the outsourced market—are expected to generate $4.4 billion in sales this year, according to Socha Consulting of St. Paul, Minn.